Government considers rolling back insulation standards

Building and construction minister Chris Penk wants to roll back insulation standards that save a new home an estimated 40 percent on heating.

Upgrades to insulation and glazing requirements in May 2023 were the first significant improvements to insulation standards in New Zealand in more than a decade.

According to correspondence released to RNZ under the Official Information Act, government experts told Penk the old standards were "significantly lower" than other countries with similar climates, including relevant parts of Australia, the UK, Ireland, and the US.

They told him upgrades had overwhelming support from the public and the building sector when they were brought in - and they reduced heating requirements in a new, four-bedroom home by up to 40 percent, at an estimated upfront cost increase of up to 2.8 percent.

This did not persuade Penk, who told officials he had heard from builders and developers in Tauranga and the rest of Bay of Plenty that the standard, known as H1, added $40,000- 50,000 cost to a new home and created overheating issues.

Urgent investigation called for

Asked about wanting to roll back H1, Penk sent a statement to RNZ saying he had asked MBIE to "urgently investigate" the cost of the changes.

"Builders frequently raise concerns with me over the new requirements within clause H1 of the Building Code that they say are adding tens of thousands of dollars onto the cost of a home. There are also frequent reports of moisture and overheating issues that are leading to increased energy usage making the requirements counter-productive," he said.

"In the middle of a housing crisis, while Kiwis are still living in cars and emergency accommodation such as motels, it is critical that we don't create artificial barriers through well intended but badly implemented policies."

RNZ understands there were discussions with the industry about less drastic changes that might have addressed some of the issues builders were raising. It's not clear from the emails how these were resolved.

But in an email to Penk on 24 May officials at the Ministry for Business, Innovation and Employment (MBIE) said they would begin work to undo changes to the H1 part of the Building Code.

Penk had told them by email that while he agreed with concerns that changing the system too much would lead to uncertainty for the building sector, he had decided returning the Building Code to a "known prior state is the lightest possible touch in terms of making change….I am keen to move forward in any case".

Industry views

Before the change was introduced, 99 percent of public submissions during consultation supported raising insulation standards.

When the changes were brought in, H1 had endorsement from the Master and Certified Builders Associations, the Insulation Association, the Institute of Architects, the Wood Processing and Manufacturers' Association, the National Association of Steel-framed Housing, Concrete New Zealand, the Window and Glass Association, BRANZ, the Green Building Council, and the Building Advisory Panel, MBIE told the minister.

Consultants at BRANZ and Beca had calculated the heating and cooling benefits of the changes.

As well as reducing heating requirements in new homes by 40 percent, the department estimated the H1 changes reduced the energy needed to heat and cool larger commercial buildings by 23 percent on average.

However, once the changes were implemented, MBIE received a large number of unprompted complaints in a building sector survey asking how MBIE could support the sector.

Complaints included that homes were now too warm and owners were having to run air conditioning in winter, that the upgrades had added $35,000 cost to a four-bedroom home, that the changes were adding 6-7 percent to building costs, that many architects or designers did not understand them properly, and that the H1 changes were "excessive" or, according to one respondent, "based on fanciful ideas of environmentalist and greedy suppliers".

Penk's email said builders and developers had complained to him when he visited them in Tauranga and Bay of Plenty.

He also cited an unnamed "gentleman who does building inspection work on contract… [who] says that he can quantify the additional energy needing to be expended to cool homes that are too warm (as compared with and weighed against the warming of homes that are too cool, of course)".

A spokesperson for the minister said there had been discussions with the person about getting these figures, but MBIE also needed to "do a proper formal look into how H1 is working in the real world which is what the minister has asked for".

One of the other complainants Penk cited in his email to officials was from a representative of Fletcher Building, who had raised issues about ventilation.

Earlier this year, Fletcher Residential and Development chief executive Steve Evans told RNZ overheating could be a an issue in new homes, if homes weren't designed properly.

He also said the new insulation standards were going well, and the added wall insulation and other improvements required were providing "significant" benefits to people by keeping out cold and damp.

RNZ has approached the company for comment.